It may be that US financial conditions are still relatively easy:
As it plunges into recession:
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But, with the Fed still tightening owing to wild inflation and wage growth:
US housing is beginning to buckle and will make everything economic worse in due course.
It’s not a price bust. At least, not yet. Prices are still rising:
Where the monetary rubber is hitting the road is in construction. Sales are tumbling:
This repeats the pattern of 70s housing busts in which prices were fine but building activity was wildly volatile. There’s a huge pipeline of activity to plunge next:
And, the money chart, a recession will follow to clear the inventory:
Lots of downsides ahead for the US economy yet.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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